PSU and Realty stocks key outliers in 2023. Nifty PSE, Nifty Realty Index rise over 70% outperforming others.
Public Sector Stocks and Realty sector stocks have been key outliers having found favor from investors during 2023. While the Benchmark indices Nifty and Sensex have returned around 18.5% and 17.5% respectively, the NSE Realty Index and NSE PSE index (thematic index) have seen gains of 77.6% and 74.6% outperforming most other sectoral indices and the benchmark Indices.
As Public Sector undertakings in the Defense sector have seen strong gains driven by strong order inflows looking at governments focus on Atmanirbhar Bharat and Make in India initiatives, Other PSU’s also have seen strong gains. Coal India, with strong uptick in production, power producers as NTPC, capital goods major BHEL and many others have given strong returns.
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The Nifty realty Index has been the largest gainer. Analysts ta ICICI Securities have highlighted that concerns over rising mortgage rates impacting demand have been addressed by all companies under their coverage which clocked record residential sales bookings in FY23 (up 43% YoY in value terms) and momentum sustained in H1FY24 in spite of the absence of big-ticket launches by most developers.
All coverage companies have a large launch pipeline for festive season and H2FY24 (September’23-March’24), said analysts at ICICI Securities. Hence, they estimate pan-Indian residential market share for companies under their coverage to grow from 24% in FY23 to 28% in FY25 led by sales booking CAGR compund annual growth) of 13.8% over FY23-25.
Meanwhile the other key index gainers during 2023 included Auto, Infra and Public Sector Banks. The Nifty Auto index stands out with gains of more than 40% during calendar year 2023 till date. Nifty Infra index (thematic index) and Nifty PSU Banks with gains of 35.95% and 33.44% also have given handsome returns.
The Auto makers have seen strong gains led by steady demand and sales growth for passenger vehicles, pickup in demand for two wheelers while commercial vehicles too have seen sales momentum continue. Overall, the earnings of auto companies are likely to grow 66% year-on-year in FY24 as per HDFC Securities Estimates. The same is being reflected in the stock price gains.
Infrastructure stocks have remained in the spotlight looking at government spending and focus on execution before elections. For PSU Banks the concerns on non-performing assets or NPAs are behind. While strong credit growth and increasing net interest margins are improving the outlook.
Among others Pharma and Healthcare stocks, power and IT companies too have risen well. Nifty Pharma, Nifty Healthcare, Nifty IT and thematic index Nifty Energy and Nifty commodities have clocked in gains of more than 25%.
Nifty commodities index includes cement manufacturers as UltraTech Cement , Shree Cement, power producers NTPC, Ferrous and non-ferrous companies, companies in the oil and gas space including Reliance Industries amongst others.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions
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Published: 19 Dec 2023, 03:10 PM IST
